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Collectively the world’s largest exporter of generic drugs, Indian drug firms have been facing headwinds at home and abroad. As Prime Minister Narendra Modi settles into his second term, the industry is looking for increased assistance from his government.

Reaching that goal will require stronger collaboration between pharma companies and government agencies, IPA secretary general Sudarshan Jain says. He says that the industry needs to seize opportunities domestically in India’s health program for poor and vulnerable families. Internationally, Jain sees the industry expanding in China, Japan, and Latin American countries.

The challenges start with domestic drug research and development. Unlike academic researchers in economically developed countries, those in India frequently are unable to start a company while retaining their academic positions, says Nirmal Kumar Ganguly, former director general of the Indian Council of Medical Research. “Our academia-industry interaction needs to be strengthened,” he says, by facilitating technology transfer and allowing academic researchers to start companies, stay with those companies as they mature, and share in the profits.

Shashi Bala Singh, director of the National Institute of Pharmaceutical Education and Research, agrees that both academia and industry need to be more open to partnerships, with contract research organizations in the mix as well. Focusing on identifying new uses for existing drugs, understanding how genetic variation affects response to drugs, and developing biosimilars will ensure “profitable pharmaceutical businesses and form a win-win situation for pharmaceutical industries and for the end user—the patient,” she says.

Companies would also like the government to ease difficulties in conducting domestic clinical trials. The issues include trial approval delays, poor management of contract research organizations and other stakeholders, compensation for injured participants, and liability for medical professionals. Also, even if companies manage to navigate those hurdles, drug approvals are subject to what the industry considers overly cumbersome regulations for both new drugs and biosimilars, which are generic versions of biologic drugs such as proteins.

While campaigning, Modi and his party promised to reduce health expenditures and make health care accessible to all. Part of that promise includes establishing more health and wellness centers with telemedicine and diagnostic capabilities. Another part involves more government outlets, called Jan Aushadhi Medical Stores, selling generic drugs at reduced prices. These moves may strengthen demand for generics and provide traction for initiatives to increase manufacturing capacity, clarify regulations for online pharmacies, and improve drug quality, which is also a key need for international markets.

However, the push to reduce health care costs will also likely increase pressure on pricing—a hot topic in India as the government has implemented price controls over the last several years. Groups that advocate for improved access to health care, such as the All India Drug Action Network (AIDAN), think there is room to tighten prices further. Drugs not currently subject to price controls “are overpriced and stacked in favor of industry,” AIDAN co-convener Chinu Srinivasan says. “They shouldn’t complain.”

Meanwhile, India’s drugmakers are also looking for market gains beyond the country’s borders, exploring avenues in China and Japan and reviving those in Africa, Europe, the Commonwealth of Independent States, and Latin America.

The government could help such international expansion efforts by harmonizing domestic regulations with agencies such as the European Medicines Agency, US Food and Drug Administration, and Health Canada, Ganguly says. Then, “our products could reach these countries and their products could be used by us expeditiously,” he says. “This is necessary for economic development of markets as well as saving some patients who will otherwise die without access to recently discovered drugs.”

As for China, a stronger diplomatic effort may be in order. China agreed last year to reduce tariffs on imports of Indian medicines and expedite approval for drugs manufactured in India. Those promises have gone unmet, leaving Indian drug producers facing high costs and delays in registering their products in China. Also, while US and European regulators accept clinical trials and bioequivalent studies conducted in India, China does not.

Even if pharmaceutical companies can succeed in strengthening drug development and increasing demand domestically and internationally, they still face an obstacle in the form of raw material supply. India currently imports nearly 80% of its active pharmaceutical ingredients from China. Such reliance on imports risks supply disruptions and price volatility. Making more ingredients domestically would help, but companies have struggled with inadequate infrastructure. They want more reliable water and electricity, expansion of special economic zones to facilitate international trade, and government support in the form of tax incentives, capital subsidies, and easier license renewals.

In addition, the pharmaceutical industry would like to see the government invest more in training a skilled workforce. As the industry develops more biosimilars and other more complex pharmaceuticals, it will need more personnel able to handle the demands of manufacturing such products, the IPA and McKinsey report says. In one example project, the state of Goa in western India has partnered with the pharmaceutical company Cipla to launch the Cipla Technical Academy. Students with bachelors or masters degrees in science undergo six months of training at the academy, followed by onsite training at Cipla. After completing the training, students who are not hired by Cipla get assistance from the Goa Labour and Employment Department to find jobs elsewhere.

Those who prescribe and dispense more complex pharmaceuticals could also use additional training, some suggest. Medical school courses need to better incorporate biologics and therapies for chronic conditions into their curricula, while pharmacy programs should include artificial intelligence, blockchain technologies, and intellectual property, says the IPA’s Jain.

Helping with all of these issues is a tall order for Modi’s administration, which in its first 100 days has touted work on housing projects, rural infrastructure such as water supplies and roads, and an education reform program that includes establishing a new National Research Foundation to fund, coordinate, and foster research. But worries are growing about an economic slump, and earlier this week the government released some stimulus measures, including allowing foreign electronics and pharmaceutical companies to invest in contract manufacturers. The need to turn around the economy may mean that the pharmaceutical industry gets at least some of the other intervention it’s asking for.